Koninklijke Bam Groep Nv · EURONEXT:BAMNB
Koninklijke Bam Groep Nv — Royal BAM Group — Investor Day (April 2017)
84 slides from Koninklijke Bam Groep Nv's investor day presentation, Apr 6, 2017
Slide 1: Capital markets event 2017
Capital markets event 2017 Amsterdam, 6 April 2017
Slide 2: Today's programme
Royal BAM Group nv Today’s programme Strategy outline Rob van Wingerden – CEO Our people Rob Zuidema – Group HR Director Public private partnerships Chris Williams – Finance Director BAM PPP Stage gate tendering Erik Bax – COO Digital construction platform Rob van Kampen – Director BAM Startup Strat
Slide 3: Strategy outline
Strategy outline Rob van Wingerden – CEO
Slide 4: Our mission and vision underpin the strategy
Royal BAM Group nv Our mission and vision underpin the strategy … Building the present, creating the future Leading in Performance, Innovation, Sustainablility Mission Vision Why are we in business? Where do we want to be in 2020? We create sustainable environments that By 2020 we are recognised as
Slide 5: Performance measures
Royal BAM Group nv Performance measures Profit Planet People ROCE > 10% Net Positive Impact Safety IF < 3.5 Capital markets event | 6 April 2017 5
Slide 6: Strategy execution Profit
Royal BAM Group nv Strategy execution Profit Return on capital employed Trade working capital efficiency 15% 2.000 0% 0 10% 1.500 -2% -200 5% -4% -400 1.000 -6% 0% -600 -8% -5% 500 -10% -800 -10% 0 -12% -1.000 2014 2015 2016 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 Capital employed Return on cap
Slide 7: Strategy execution People & Planet
Royal BAM Group nv Strategy execution People & Planet Safety CO2 Waste (IF) (kilotonnes) (kilotonnes) 7 300 250 6 250 200 5 4 200 150 3 2 150 100 1 0 100 50 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 Capital markets event | 6 April 2017 7
Slide 8: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 Profit Planet People ‘Building the present, creating the future’ Focus Shape Create project business future portfolio portfolio portfolio Differentiating capabilities BAM’s unique culture Capital markets event | 6 April 2017 8
Slide 9: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 Leading in Profit Planet Performance, People Innovation, Sustainablility ‘Building the present, creating the future’ Doing Doing Doing things better new better things things Focus Shape Create project business future portfolio portfolio portfolio We make Differe
Slide 10: Unlock potential
Royal BAM Group nv Unlock potential Scale Expertise Capital markets event | 6 April 2017 10
Slide 11: Our people
Our people Rob Zuidema – Group HR Director
Slide 12: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 ‘Building the present, creating the future’ Focus Shape Create project business future portfolio portfolio portfolio Differentiating capabilities BAM’s unique culture Performance, Learning, Ownership and Capital markets event | 6 April 2017 Collaboration 12
Slide 13: Royal BAM Group nv Capital markets event | 6 April 2017
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Slide 15: Royal BAM Group nv Capital markets event | 6 April 2017
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Slide 16: Royal BAM Group nv Capital markets event | 6 April 2017
Royal BAM Group nv 150 Capital markets event | 6 April 2017 16
Slide 17: Royal BAM Group nv Capital markets event | 6 April 2017
Royal BAM Group nv 1,500 Capital markets event | 6 April 2017 17
Slide 18: Royal BAM Group nv Capital markets event | 6 April 2017
Royal BAM Group nv 20,000 Capital markets event | 6 April 2017 18
Slide 19: Creating the multiplier effect
Royal BAM Group nv Creating the multiplier effect ... my own experience Safety One company A/B testing International growth Strategic agenda embraced by Common language Tools, systems and leadership who lead and goals uniform processes by example Capital markets event | 6 April 2017 19
Slide 20: Common language and goals
Royal BAM Group nv Common language and goals Pro-active ownership “I take initiative to prevent Predictable performance rather than fix” “I deliver what I promise” Open collaboration “I share, so we all gain” Scalable learning “I ask, listen, and support, so that we learn collectively” Capital marke
Slide 21: Tools, systems and uniform processes
Royal BAM Group nv Tools, systems and uniform processes 15 Roadshows 85 project managers Monthly meeting cadence Safety first! > 1,500 colleagues reached participated since 2015 Roadshows PM Seminar MB Meetings World Safety Day Strategy newsflash Online dialogue with Strategy presentation to Focus i
Slide 22: Strategy Action Results
Royal BAM Group nv Strategy Action Results ‘Building the present, creating the future’ Profit Focus Shape Create 20,000 ` project business future portfolio portfolio portfolio Planet Differentiating capabilities BAM’s unique culture People Capital markets event | 6 April 2017 AMS
Slide 23: Public private partnerships
Public private partnerships Chris Williams – Finance Director BAM PPP
Slide 24: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 ‘Building the present, creating the future’ Focus Shape Create project business future portfolio portfolio portfolio We make Differentiating capabilities it before we make it BAM’s unique culture Capital markets event | 6 April 2017 24
Slide 25: Public private partnerships (1)
Royal BAM Group nv Public private partnerships (1) Contracting Authority Advisers: Technical, Legal, Finance, Insurance Project Agreement Characteristics • Long term partnerships Equity Equity PPP Co Debt Senior provider Lenders • Private finance Advisers: Advisers: Legal, Finance, Technical, Legal,
Slide 26: Public private partnerships (2)
Royal BAM Group nv Public private partnerships (2) Gross Availability Payment Benefits • Solution to short term capital constraints Maintenance Opex • Public sector pays for availability CAPEX • Stimulates innovation through “whole life cost approach” • Value for Money Availability Completion End ce
Slide 27: Overview BAM PPP
Royal BAM Group nv Overview BAM PPP 31 5 Glasgow Operational Under Management 9 6 Kill Under Our Offices Construction Solihull Bunnik • RoE in 2016 > 12% • Recurring revenue Operations & Maintenance Brussels Frankfurt in excess of €100 million per year for BAM • Directors’ valuation portfolio €238 m
Slide 28: BAM PPP role in BAM's strategy
Royal BAM Group nv BAM PPP role in BAM’s strategy Differentiated & specialist activity Large multidisciplinary projects 01. 02. 03. Short term Long term Long term Entire project lifecycle construction operations / equity maintenance investment Digitalised construction and asset management Creating v
Slide 29: Unique differentiating capability PGGM JV (1)
Royal BAM Group nv Unique differentiating capability PGGM JV (1) Returns model PGGM returns € PGGM Equity 80% JV-Equity Equity stake bridge bridge repaid BAM PPP 20% Time Construction (~3y) Operations & Asset Management (~25y) BAM PPP € € returns Returns on BAM PPP 20% equity stake BAM PPP return pr
Slide 30: Unique differentiating capability PGGM JV (2)
Royal BAM Group nv Unique differentiating capability PGGM JV (2) Benefits Project cash flows ( € million) • Exclusive access to equity to support the 80 PPP bid pipeline 70 • Cost efficient structure 60 50 Success • Initial commitment €240 million 40 • Current commitment €775 million 30 20 10 2011 2
Slide 31: Unique differentiating capability PGGM JV (3)
Royal BAM Group nv Unique differentiating capability PGGM JV (3) Capital markets event | 6 April 2017 31
Slide 32: Refinancing – creating value
Royal BAM Group nv Refinancing – creating value Pre and Post Refinancing Shareholder Cashflows (€ million) • Cash flow improvements 20 • BAM PPP’s 20% investment 18 1.5 mln • BAM PPP - Project management fees 16 14 • BAM PPP - Financial advisory fees 12 10 8 6 4 2 Dec ´16 Dec ´20 Dec ´24 Dec ´28 Dec
Slide 33: BAM PPP prospects
Royal BAM Group nv BAM PPP prospects 10 28 Active Bids Imminent Bids Strong pipeline of investment opportunities Europe needs €1.5 - €2 trillion of infrastructure investments by 2020* * Source: Freshfields Bruckhaus Deringer LLP Capital markets event | 6 April 2017 33
Slide 34: Our capabilities in PPP
Royal BAM Group nv Our capabilities in PPP People Partnerships Performance Bid Win Ratio (since BAM PPP inception in 2005) 41% Capital markets event | 6 April 2017 Sea lock, IJmuiden, the Netherlands 34
Slide 35: Stage gate tendering
Stage gate tendering Erik Bax – COO
Slide 36: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 ‘Building the present, creating the future’ Doing things better Focus Shape Create project business future portfolio portfolio portfolio Differentiating capabilities BAM’s BAM’s unique unique culture culture Capital markets event | 6 April 2017 36
Slide 37: Focus project portfolio drives margin improvement
Royal BAM Group nv Focus project portfolio … drives margin improvement • Focus on projects where we can use 2016 - 2020 scale or expertise to win • Improving order book quality Σ project results Average margin in 2-4% range Focus More predictable outcome Σ projects Capital markets event | 6 April 20
Slide 38: Implementation of data driven tendering
Royal BAM Group nv Implementation of data driven tendering Tender selection Sales funnel Tendering Execution CRM systems Stage gate database Project database Feedback Capital markets event | 6 April 2017 38
Slide 39: Stage gate tendering
Royal BAM Group nv Stage gate tendering Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 39
Slide 40: Categorisation determines governance
Royal BAM Group nv Categorisation determines governance Risk Governance Number of Category Stage gates & Control Tenders Exposure A Executive Board B COO C OpCo D BU Capital markets event | 6 April 2017 40
Slide 41: Categorisation criteria
Royal BAM Group nv Categorisation criteria Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 41
Slide 42: Categorisation
Royal BAM Group nv Categorisation • Contract value • Contract type • Our experience • Logistics • Organisational complexity • Ground conditions • Permits • Client track record & relationship Capital markets event | 6 April 2017 42
Slide 43: Stage gate 1
Royal BAM Group nv Stage gate 1 Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 43
Slide 44: Decision to tender
Royal BAM Group nv Decision to tender • Health, Environment and Safety • Client track record & relationship • Strategy to win • Track record project team • Type of bid: price only or price & quality • Anticipated contract terms • Funding and expected cash flow • Joint venture & supply chain partners
Slide 45: Stage gate 2
Royal BAM Group nv Stage gate 2 Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 45
Slide 46: Validation to Tender
Royal BAM Group nv Validation to Tender • Ground conditions • Permits • Contract terms • Pre qualified competition • Bonding requirements • Experience tender team • Lessons learnt from other projects • Decide for peer review • Decide for tender assessment Capital markets event | 6 April 2017 46
Slide 47: Stage gate 3
Royal BAM Group nv Stage gate 3 Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 47
Slide 48: Decision to bid
Royal BAM Group nv Decision to bid • Project margin • Cash flow • Risk & opportunity profile • Experience project team • Supply chain • Time table • Quality tender • Project planning • Insurance & bank guarantees Capital markets event | 6 April 2017 48
Slide 49: Stage gate 4
Royal BAM Group nv Stage gate 4 Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 49
Slide 50: Approval final contract
Royal BAM Group nv Approval final contract • Only if changes to set of conditions agreed in stage gate 3 Capital markets event | 6 April 2017 50
Slide 51: Stage gate 5
Royal BAM Group nv Stage gate 5 Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6 April 2017 51
Slide 52: Quality assurance options
Royal BAM Group nv Quality assurance options Peer Tender Operational review assessment audit Stage gate 1 Stage gate 2 Stage gate 3 Stage gate 4 Stage gate 5 Categorisation Decision Validation Decision Approval If won: to tender to Tender to bid final contract Reality check Capital markets event | 6
Slide 53: Peer review
Royal BAM Group nv Peer review • Knowledge sharing • Critical friend Characteristics • Tender team • Tender desk • BAM 'wide' experts Participants • 1-2 day meetings • Reporting to tender Execution manager Capital markets event | 6 April 2017 53
Slide 54: Tender assessment
Royal BAM Group nv Tender assessment • Independent check • Focus on high risk areas Characteristics • Tender team • Tender desk Participants • BAM ‘wide’ experts • Deep dive (~1 - 3 days) • Report to the Executive Execution Board Capital markets event | 6 April 2017 UK Antarctica research facilities
Slide 55: Operational audit
Royal BAM Group nv Operational audit • Independent check • Execution tender plan • Size & quality team Characteristics • Control high risk areas • Project team • Operational auditor Participants • BAM ‘wide’ experts • Selected A & B projects • Deep dive (~1 - 3 days) Execution • Report to Executive
Slide 56: Quality order book is improving
Royal BAM Group nv Quality order book is improving • Better project selection • Improving cash flow • Higher tender efficiency • Pricing identified risks • Understanding design, technical solutions and execution methods • Contractual awareness • Average margin on new order intake in 2016 within 2-4%
Slide 57: Digital construction platform
Digital construction platform Rob van Kampen – Director BAM Startup
Slide 58: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 ‘Building the present, creating the future’ Doing new things Focus Shape Create project business future portfolio portfolio portfolio Differentiating capabilities BAM’s BAM’s unique unique culture culture Capital markets event | 6 April 2017 58
Slide 59: Create future portfolio
Royal BAM Group nv Create future portfolio Digital construction process Digital built environment Capital markets event | 6 April 2017 59
Slide 60: Digital construction process
Royal BAM Group nv Digital construction process Add digital Start digital Capital markets event | 6 April 2017 60
Slide 61: The story of the BAM Startup
Royal BAM Group nv The story of the BAM Startup Capital markets event | 6 April 2017 61
Slide 62: How the construction industry works today
Royal BAM Group nv How the construction industry works today Capital markets event | 6 April 2017 62
Slide 63: Industry is reluctant to innovate and slow to improve
Royal BAM Group nv Industry is reluctant to innovate and slow to improve The annual Large projects And take 51% R&D spending in productivity growth are typically construction industry only increased 1% 80% 20% 40% <1% over the past 20 over budget longer to finish 25% years Source: McKinsey&Company,
Slide 64: BAM Startup at the edge of BAM
Royal BAM Group nv BAM Startup at the edge of BAM Capital markets event | 6 April 2017 Startup in B.Amsterdam 64
Slide 65: BAM's digital transformation: an integrated multi-stakeholder approach
Royal BAM Group nv BAM’s digital transformation: an integrated multi-stakeholder approach Capital markets event | 6 April 2017 65
Slide 66: Digital co-makers: partnering to grow
Royal BAM Group nv Digital co-makers: partnering to grow Capital markets event | 6 April 2017 66
Slide 67: We are creating a digital platform
Royal BAM Group nv We are creating a digital platform We make it digital before we make it physical! Capital markets event | 6 April 2017 67
Slide 68: Think Big, Act Small and Scale-up Fast
Royal BAM Group nv Think Big, Act Small and Scale-up Fast Roadmap and investment • Start with 1 kitchen in April • Scale up to 50 kitchens • Renovate entire house €1,500,000 Facade Building services €500,000 Roof Bathroom MVP House Capital markets event | 6 April 2017 68
Slide 69: Think Big, Act Small and Scale-up Fast
Royal BAM Group nv Think Big, Act Small and Scale-up Fast Step 1 Step 2 Step 3 Step 4 51% Kitchen Entire Block of Neighbourhoods renovation house houses Capital markets event | 6 April 2017 69
Slide 70: Creating value
Royal BAM Group nv Creating value Shareholders Profit Clients ` Supply chain ROCE Planet Employees Society People Capital markets event | 6 April 2017 70
Slide 71: BAM Startup: Let's create the future together
Royal BAM Group nv BAM Startup: Let’s create the future together Capital markets event | 6 April 2017 71
Slide 72: From unimaginable unpredictable to imaginable predictable
Royal BAM Group nv From unimaginable unpredictable to imaginable predictable Capital markets event | 6 April 2017 72
Slide 73: Strategy in action
Strategy in action George Mazloumian – MD BAM International
Slide 74: Strategy 2016-2020
Royal BAM Group nv Strategy 2016-2020 ‘Building the present, creating Performance, the future’ Leading in Innovation, Sustainablility Doing Doing Doing things better new better things things Focus Shape Create project business future portfolio portfolio portfolio We make Differentiating capabilities
Slide 75: BAM International has a long-standing track record of worldwide construction
Royal BAM Group nv BAM International has a long-standing track record of worldwide construction Currently Active BAM International Area Office BAM International Office Head Office the Netherlands ... and uses that experience to pursue a diversification from near-shore expert to on-shore innovative s
Slide 76: Near-shore marine infrastructure has been pivotal for BAM International
Royal BAM Group nv Near-shore marine infrastructure has been pivotal for BAM International, strongly driven by resources … APM Container Terminal, Moín, Phase 2A - Costa Rica, APM Terminals Jebel Ali Terminal 4 Phase 1, United Arab Emirates, DP World Quay wall Limbe Shipyard, Cameroon, Cameroon Ship
Slide 77: BAM International diversification strategy
Royal BAM Group nv BAM International diversification strategy From near-shore expert to on-shore innovative specialist Focus project portfolio Shape business portfolio Create future portfolio Diversification Strengthened business development Innovative through Rigid tender selection (digital) client
Slide 78: Focusing the portfolio by using differentiating capabilities
Royal BAM Group nv Focusing the portfolio by using differentiating capabilities Sales funnel Tendering Execution CRM systems Stage gate database Project database +35% -8% Differentiation Strict control Client focus Partnering & BIM Capital markets event | 6 April 2017 78
Slide 79: Shaping the project portfolio by open collaboration
Royal BAM Group nv Shaping the project portfolio by open collaboration and leveraging on BAM’s capabilities Products & enablers Capatalise on capabilities First successes • Metro Tunnel tender (AUS) • Hospital project and tenders in and outside Europe (UK, IRE, DK, global) 1+1>2 • Stadium project an
Slide 80: Creating the future portfolio by delivering cutting edge digital solutions
Royal BAM Group nv Creating the future portfolio by delivering cutting edge digital solutions to our clients Capital markets event | 6 April 2017 80
Slide 81: We make it before we make it
Royal BAM Group nv We make it before we make it Museum of the Future Movie We make it before we make it Capital markets event | 6 April 2017 81
Slide 82: The future is bright!
Royal BAM Group nv The future is bright! BAM provides innovative digital solutions to its global clients by open collaboration and leveraging on its capabilities Capital markets event | 6 April 2017 82
Slide 83: Q&A
Q&A
Slide 84: Wrap up
Wrap up Rob van Wingerden – CEO